**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549







FORM
      10-KSB







**[X] 
      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934**




**For the fiscal year ended June 30, 2007**





**[ 
      ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934**


****


**For the transition period from________to________**





**Commission
      fle number 000-05391**







METWOOD,
        INC.


(Name
      of
      small business issuer in its charter)







**NEVADA**
            **83-0210365**(State
                or other jurisdiction
            (IRS
                Employerof
                incorporation or organization)
            Identification
                No.)




**819
      Naff Road, Boones Mill, VA 24065**


(Address
      of principal executive offices)





**(540)
      334-4294**


(Issuer’s
      telephone number)







Securities
      registered under Section 12(b) of the Exchange Act:


None





Securities
      registered under Section 12(g) of the Exchange Act:


$0.001
      Par Value Common Voting Stock


(Title
      of
      Class)










Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15 (d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes
X No





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes [  ] No [X]





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or an
      amendment to this Form 10-KSB. [  ]





State
      issuer’s revenues for its most recent fiscal year: $4,440,949





As
      of
      September 7, 2007 there were 11,923,999 common shares outstanding, and the
      aggregate market value of the common shares (based upon the average of the
      bid
      price ($.35) reported by brokers) held by non-affiliates was approximately
      $1,150,801.





Transitional
      Small Business Disclosure Format (check one): Yes [  ] No [X]














METWOOD,
      INC. AND SUBSIDIARY


FORM
      10-KSB


TABLE
      OF
      CONTENTS





*Page*PART
                IItem
                1          Description of
                Business
            4Item
                2          Description of
                Property
            8Item
                3          Legal
                Proceedings
            8Item
                4          Submission of Matters
                to a Vote of Security Holders
            8PART
                IIItem
                5          Market for Common Equity and
                Related Stockholder Matters
            8Item
                6          Management’s
                Discussion and Analysis or Plan of Operation
            9Item
                7          Financial
                Statements
            11Item
                8          Changes in and
                Disagreements with Accountants on Accounting and Financial
                Disclosure
            28Item
                8A       Controls and Procedures
            28PART
                IIIItem
                9          Directors and Executive
                Officers of the Registrant
            28Item
                10        Executive
                Compensation
            30Item
                11        Security Ownership of Certain
                Beneficial Owners and Management
            31Item
                12       Certain Relationships and Related
                Transactions
            32Item
                13       Exhibits and Reports on Form
                8-K
            33Item
                14        Principal Accountant Fees and
                Services
            33Signatures
            34Index
                to Exhibits
            35




2
 *Table
          of Contents*




*SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS*





*This
      Annual Report on Form 10-KSB contains certain forward-looking statements within
      the meaning of the Private Securities Litigation Reform Act of 1995 with respect
      to the financial condition, results of operations, business strategies,
      operating efficiencies or synergies, competitive positions, growth opportunities
      for existing products, and plans and objectives of management. Statements that
      are not historical in nature and which include such words as “anticipate,”
“estimate,” “should,” “expect,” believe,” “intend,” and similar expressions are
      intended to identify forward-looking statements for the purpose of the safe
      harbor provided by Section 21E of the Exchange Act and Section 27A of the
      Securities Act.*




3
 *Table
          of Contents*





**PART
      I**





**Item
      1. Description of Business**





Business
      Development





We
      were
      incorporated under the laws of the State of Wyoming on June 19, 1969. Following
      an involuntary dissolution for failure to file an annual report, we were
      reinstated as a Wyoming corporation on October 14, 1999. On January 28, 2000,
      we, through a majority shareholder vote, changed its domicile to Nevada through
      a merger with EMC Energies, Inc., a Nevada corporation. The Plan of Merger
      provided for the dissenting shareholders to be paid the amount, if any, to
      which
      they would be entitled under the Wyoming Corporation Statutes with respect
      to
      the rights of dissenting shareholders. We also changed our par value to $.001
      and the amount of authorized common stock to 100,000,000 shares.





Prior
      to
      1990, we were engaged in the business of exploring for and producing oil and
      gas
      in the Rocky Mountain and mid-continental areas of the United States. We
      liquidated substantially all of its assets in 1990 and were dormant until June
      30, 2000, when it acquired, in a stock for-stock, tax-free exchange, all of
      the
      outstanding common stock of a privately held Virginia corporation, Metwood,
      Inc.
      (“Metwood”), which was incorporated in 1993. See Form 8-K and attached exhibits
      filed August 11, 2000. Metwood has been in the metal and metal/wood construction
      materials manufacturing business since 1992. Following the acquisition, we
      approved a name change from EMC Energies, Inc. to Metwood, Inc.





Effective
      January 1, 2002, Metwood acquired certain assets of Providence Engineering,
      PC
      (“Providence”), a professional engineering firm with customers in the same
      proximity as Metwood, paying $60,000 in cash and issuing 290,000 Metwood common
      shares to the two Providence shareholders (one of whom was also an officer
      and
      existing shareholder of Metwood prior to the acquisition). These shares were
      valued at the closing quoted stock price of $1.00 per share at the effective
      date of the purchase. On October 15, 2002, $15,000 additional cash was paid
      to
      one shareholder in exchange for the shareholder’s surrender of 15,000 shares of
      Metwood stock, and $50,000 was paid to that shareholder in two installments
      of
      $25,000 each (on January 15, 2004 and April 15, 2004) for 275,000 shares. All
      of
      the originally issued 290,000 shares of Metwood stock have thus been repurchased
      as of June 30, 2004. The initial purchase transaction was accounted for under
      the purchase method of accounting.





The
      consolidated company (“the Company, We, Us, Our”) provides construction-related
      products and engineering services to residential customers and contractors,
      commercial contractors, developers and retail enterprises, primarily in
      southwestern Virginia.





Principal
      Products or Services and Markets





*Metwood
      —*Residential builders are aware of the superiority of steel framing vs.
      wood framing, insofar as steel framing is lighter; stronger; termite, pest,
      rot
      and fire resistant; and dimensionally more stable in withstanding induced loads.
      Although use of steel framing in residential construction has generally
      increased each year since 1980, many residential builders have been hesitant
      to
      utilize steel due to the need to retrain framers and subcontractors who are
      accustomed to a “stick-built” construction method where components are laid out
      and assembled with nails and screws. Our initial founders, Robert Callahan
      and
      Ronald Shiflett, saw the need to combine the strength and durability of steel
      with the convenience and familiarity of wood and wood fasteners.




4
 *Table
          of Contents*





Our
      primary products and services are:





•
            Girders
                and headers




•
            Floor
                joists




•
            Floor
                joist reinforcers




•
            Roof
                and floor trusses and rafters




•
            Metal
                framing




•
            Square
                structural columns




•
            Garage,
                deck and porch concrete pour over
                systems




•
            Garage
                and post-and-beam buildings




•
            Engineering,
                design and custom building services




Metwood
      manufactures light-gage steel construction materials, usually combined with
      wood
      or wood fasteners, for use in residential and commercial applications in place
      of more conventional wood products, which are inferior in terms of strength
      and
      durability. The steel and steel/wood products allow structures to be built
      with
      increased load strength and structural integrity and fewer support beams or
      support configurations, thereby allowing for structural designs that are not
      possible with wood-only products.





*Providence
      —*Extensively involved in ongoing product research and development for
      Metwood, Providence also offers its customers civil engineering capabilities
      which include rezoning and special use submissions; erosion and sediment control
      and storm-water management design; residential, commercial, and religious
      facility site development design; and utility design, including water, sewer
      and
      onsite treatment systems. Providence’s staff is familiar with construction
      practices and has been actively involved in construction administration and
      inspection on multiple projects.





Providence
      also performs a variety of structural design and analysis work, successfully
      providing solutions for many projects, including retaining walls, residential
      framing, commercial building framing, light-gage steel fabrication drawings,
      metal building retrofits and additions, mezzanines, and seismic anchors and
      restraints.





Providence
      has designed numerous foundations for a variety of structures. Its foundation
      design expertise includes metal building foundations, traditional building
      construction foundations, atypical foundations for residential structures,
      tower
      foundations, and sign foundations for a variety of uses and
      applications.





Providence
      has also designed and drafted full building plans for several applications.
      When
      subcontracting with local professional firms, Providence has the ability to
      provide basic architectural, mechanical, electrical, and detailed civil and
      structural design services for these facilities.




Providence
      has reviewed designs by manufacturers for a variety of structures and structural
      components, including retaining walls, radio towers, tower foundations, sign
      foundations, timber trusses, light-gage steel trusses, and light-gage steel
      beams. This service enables clients to take generic designs and have them
      certified and approved for construction in the desired locality.




5
 *Table
          of Contents*





Distribution
      Methods of Products and Services




Our
        sales
        are primarily wholesale, directly to lumber yards and home improvement stores
        mainly in Virginia. We rely primarily on our own sales force to generate
        sales;
        additionally, however, our distributors in Virginia, New York, Oklahoma,
        Arizona
        and Colorado and also utilizes the salespeople of wholesale yards stocking
        our
        products as an additional sales force. We are an authorized vendor for Lowe’s,
        Home Depot, 84 Lumber, Stock Building Supply, The Contractor Yard, and many
        more. We have several stocking dealers of our Square Columns and Reinforcing
        Products. We will sell directly to contractors in areas that we do not have
        a
        dealer, but with our national dealer relationships, we typically have a dealer
        to use.  We are in discussions with national engineered I-joist
        manufacturers who are interested in marketing our products and expect to
        announce affiliations with these companies in the near future. Metwood intends
        to continue expanding the wholesale marketing of its unique products to
        retailers, to increase dealer sales, and to license our technology and products
        to increase its distribution outside of Virginia, North Carolina and the
        South.




Status
      of Publicly Announced New Products or Services





We
      have
      acquired four new patents through assignment from Robert Callahan and Ronald
      Shiflett, the origional patent holders. All four patents reflect various
      modifications to our Joist Reinforcing Bracket which will make it even easier
      for tradesmen to insert utility conduits through wood joists.





Seasonality
      of Market





Our
      sales
      are subject to seasonal impacts, as its products are used in residential and
      commercial construction projects which tend to be at peak levels in Virginia
      and
      North Carolina between the months of March and October. Accordingly, our sales
      are greater in its fourth and first fiscal quarters. We build an inventory
      of
      its products throughout the winter and spring to support its sales
      season.  Due to the Seasonality of our Local Market, we are continuing
      our efforts to expand into markets that are not so seasonally
      impacted.  We have shipped projects to Florida, Georgia, South
      Carolina, Arizona, Washington, and more.  These markets have some
      seasonality, but increased exposure in these markets will help maintain stronger
      sales year around.





Competition





Nationally,
      there are over one hundred manufacturers of the types of products produced
      by
      us. However, the majority of these manufacturers are using wood-only products
      or
      products without metal reinforcement. Metwood has identified only one other
      manufacturer in the United States that manufactures a wood-metal floor truss
      similar to that of us. However, Metwood has often found that its products are
      the only ones that will work within many customers’ design specs.





Sources
      and Availability of Raw Materials and the Names of Principal
      Suppliers





All
      of
      the raw materials used by us are readily available on the market from numerous
      suppliers. The light-gage metal used by us is supplied primarily by Dietrich
      Industries, Marino-Ware, Telling Industries, Wheeling Corrugating, and
      Consolidated Systems, Inc. Our main sources of lumber are BlueLinx, Lowe’s, 84
      Lumber Company and Smith Mountain Building Supply. Gerdau Amersteel, Descosteel
      and Adelphia Metals provide the majority of our rebar. Because of the number
      of
      suppliers available to us, its decisions in purchasing materials are dictated
      primarily by price and secondarily by availability. We do not anticipate a
      lack
      of supply to affect its production; however, a shortage might cause us to pass
      on higher materials prices to its buyers.





Dependence
      on One or a Few Major Customers





Presently
      we do not have any one customer whose loss would have a substantial impact
      on
      our operations.




6
 *Table
          of Contents*





Patents





We
      have twelve U.S. Patents:





U.S.
      Patent No. 5,519,977, “Joist Reinforcing Bracket,” a bracket that reinforces
      wooden joists with a hole for the passage of a utility conduit. We refer to
      this
      as its floor joist patch kit.





U.S.
      Patent No. 5,625,997, “Composite Beam,” a composite beam that includes an
      elongated metal shell and a pierceable insert for receiving nails, screws or
      other penetrating fasteners.





U.S.
      Patent No. 5,832,691, a continuation in part of U.S. Patent No. 5,625,997,
      “Composite Beam,” a composite beam that includes an elongated metal shell and a
      pierceable insert for receiving nails, screws or other penetrating
      fasteners.





U.S.
      Patent No. 5,921,053, “Internally Reinforced Girder with Pierceable Nonmetal
      Components,” a girder that includes a pair of “c” -shaped members secured
      together so as to form a hollow box which permits the girder to be secured
      within a building structure with conventional fasteners such as nails, screws
      and staples.





U.S.
      Patent Nos. D472,791S; D472,792S; D472,793S; and D477,210S, all modifications
      of
      Metwood’s Joist Reinforcing Bracket, which will be used for repairs of wood
      I-joists.





Each
      of
      the above mentioned patents was originally issued to the inventors our founders,
      Robert Callahan and Ronald B. Shiflett, who licensed these patents to
      us.


Canadian
        Patent Nos. 101892, 101893, 101894, and 101895 for our joist reinforcing
        bracket
        designs.





Need
      for Government Approval of Principal Products





Our
      products must either be sold with an engineer’s seal or applicable building code
      approval. Our chief engineer has obtained professional licensure in several
      states, which permits products not building code approved to be sold and used
      with his seal. We expect his licensure in a growing number of states to greatly
      assist in the uniform acceptability of its products as it expands to new
      markets. Currently, we are seeking International Code Council (“ICC”) code
      approval on its joist reinforcers and beams. Once that approval is obtained,
      the
      products can be used in all fifty states and will eliminate the need for an
      engineer’s seal on individual products. To date, our 2x10 floor joist reinforcer
      has received both Bureau Officials Code Association approval (2001) and ICC
      approval (2004).





Time
      Spent During the Last Two Fiscal Years on Research and Development
      Activities





Approximately
      fifteen percent of our time and resources have been spent during the last two
      fiscal years researching and developing its metal/wood products, new product
      lines, and new patents.





Costs
      and Effects of Compliance with Environmental Laws





We
      do not
      incur any costs to comply with environmental laws. It is an environmentally
      friendly business in that its products are fabricated from recycled
      steel.





Number
      of Total Employees and Number of Full-Time Employees





We
      had
      thirty-seven employees at June 30, 2007, thirty-five of whom were full time.




7
 *Table
          of Contents*





**Item
      2. Description of Property**





During
      the year ended June 30, 2005, we sold our facilities to a related party for
      $600,000 and subsequently leased the facilities back under a long-term lease
      agreement. We now lease our facilities in Boones Mill, Virginia, which consist
      of corporate offices, warehouses, a garage/vehicle maintenance building, and
      other multi-use buildings. The condition of these buildings is very
      good.





We
      do not
      invest in real estate or interests in real estate, real estate mortgages or
      securities of or interests in persons primarily engaged in real estate
      activities and therefore have no policies related to such investments.





**Item
      3. Legal Proceedings**





We
      are
      not a party to any legal proceedings, nor, to the best of its knowledge, is
      any
      such proceedings threatened or contemplated.





**Item
      4. Submission of Matters
      to a Vote of Security
      Holders**





None.





**PART
      II**





**Item
      5. Market for Common Equity and Related
      Stockholder Matters**





Because
      there is no active trading market for Metwood, Inc. common stock, it is
      difficult to determine the market value of the stock. Based on the average
      bid
      price for our common stock at September 7, 2007 of $.35 per share (average
      asking price of $.60), the market value of shares held by non-affiliates would
      be $1,150,801. There are no preferred shares authorized.





We
      are
      listed on the OTC Bulletin Board of the National Association of Securities
      Dealers (“NASD”) under the symbol “MTWD.OB.”





Set
      forth
      below are the high and low bid prices for our common stock for the last two
      years:





Quarter
                Ended
            High
                Bid
            Low
                BidSeptember
                2005
            $1.48
            $1.10December
                2005
            $0.81
            $1.25March
                2006
            $0.91
            $1.10June
                2006
            $0.90
            $1.03September
                2006
            $0.55
            $0.90December
                2006
            $0.35
            $0.85March
                2007
            $0.57
            $0.70June
                2007
            $0.51
            $0.70





Holders





The
      number of holders of record of our common stock as of September 7, 2007 was
      1,117. This number does not include an indeterminate number of stockholders
      whose shares are held by brokers in street name. The number of stockholders
      has
      been substantially the same during the past ten years.





Dividends





Per
      the
      negative covenants in the line-of-credit agreements, we are restricted from
      paying dividends until the debt is repaid. We have not paid any dividends on
      its
      common stock and do not intend to pay dividends in the foreseeable future.




8
 *Table
          of Contents*





**Item
      6. Management’s Discussion and Analysis or Plan of
      Operation**





Plan
      of Operation





We
      anticipate that the next twelve months will be a period of continued growth
      as
      it seeks to further expand its presence in new markets throughout the United
      States through increased numbers of distributors, licensees and dealers. ICC
      code approval is being sought for our joist reinforcers and beams and is
      expected to be obtained within the coming fiscal year. If this approval is
      obtained, product marketability would be greatly enhanced and would likely
      lead
      to higher demand.





Higher
      product demand would likely increase the need for more capital as inventory
      requirements grew, which could be met through borrowing or a stock offering.
      No
      decision has been made at the present time, however, as to which means might
      be
      used to raise capital.





Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations





Below
      are
      selected financial data for the years ended June 30, 2006 and 2007:





2006
            
            
            2007Revenues
            
            $
            4,242,123
            
            
            $
            4,440,949Net
                income
            
            $
            171,160
            
            
            $
            212,081Net
                income per common share
            
            $
            0.01
            
            
            $
            0.02Weighted
                average commonshares
                outstanding
            
            
            11,894,593
            
            
            
            11,920,259At
                June 30, 2007 and 2006:Total
                assets
            
            $
            2,375,931
            
            
            $
            2,576,675Working
                capital
            
            $
            1,342,988
            
            
            $
            1,539,453Shareholders’
                equity
            
            $
            1,951,213
            
            
            $
            2,163,296**Less
                than $.01





No
      dividends have been declared or paid during the periods presented.





*Results
      of Operations Fiscal 2007 Compared with Fiscal 2006*





*Revenues
      and Cost of Sales —*Consolidated gross sales increased $198,826,
      or 5%, for the year ended June 30, 2007 (“fiscal 2007”) compared to the year
      ended June 30, 2006 (“fiscal 2006”). Construction sales consisted of product
      sales, engineering, delivery and installation fees. Engineering sales consisted
      of fees for engineering services. Gross profit increased $171,554 (10%) from
      fiscal 2006 to fiscal 2007.





The
      increase in construction revenues was due to several factors, including adding
      inside sales support for outside sales reps, thereby freeing up the reps to
      make
      more daily contacts; increased marketing efforts, such as regular seminars
      for
      building inspectors and architects on our systems and services; and strengthened
      dealer relationships. Also, product prices were raised in the third quarter
      to
      compensate for the increasing cost of steel. In addition, we experienced
      heightened demand for our pour over systems for fiscal 2007 compared to fiscal
      2006 which had the added benefit of increasing related installation fees. Growth
      in engineering sales resulted from both higher demand and quicker turnaround
      time on jobs.





Cost
      of
      sales increased by $27,272 overall (1%) in fiscal 2007 compared to fiscal 2006.
      On the construction side, cost of sales increased $52,573 (2%), while cost
      of
      engineering sales decreased $25,301 (16%). The rise in construction costs was
      due primarily to the higher steel prices we faced in fiscal 2007. However,
      efforts were made to secure as much steel as possible just prior to the new
      higher prices taking effect, thereby alleviating some of the impact of those
      increases. We anticipate that steel prices will continue to be high for the
      foreseeable future.




9
 *Table
          of Contents*





*Administrative
      expenses —*These costs increased $80,128, or 5%, to $1,541,711 in fiscal
      2007 from $1,461,583 in fiscal 2006. The increase was due primarily to higher
      advertising and marketing, insurance and payroll costs. The increase is mainly
      attributable to an increase in payroll costs from $692,372 in fiscal 2006 to
      $771,793 in fiscal 2007 or an increase of $79,421 (11%). We hired new personnel
      to capacitate the increase in sales and new customers in fiscal
      2007.





*Other
      Income (Expense) —*These amounts are immaterial to the financial statements
      taken as a whole and include miscellaneous and sundry items only.





*Income
      Taxes —*In fiscal 2007 our income tax expense was $131,778 compared to
      income tax expense of $89,145 in fiscal 2006. We increased our deferred tax
      liability by $9,855 in fiscal 2007. The primary components of the deferred
      tax
      liability relate to timing differences between book and tax depreciation and
      the
      treatment of goodwill amortization.,





*Liquidity
      and Capital Reserves —*Cash flows provided by operations in fiscal 2007
      were $53,872 versus cash flows provided by operations in fiscal 2006 of $84,986,
      a decrease of $31,114. The decrease in cash flows from operations was primarily
      attributable to higher net income attributable to the increase in sales in
      fiscal 2007 and an increase in inventory which required cash outlays. We also
      used $153,032 for capital improvements and purchases of fixed assets, while
      we
      spent $231,115 for purchases of fixed assets in fiscal 2006. Financing
      activities in fiscal 2007 provided $37,567 compared to $11,402 used in fiscal
      2006. The main provision of funds in 2007 was due to a net increase in
      borrowings under our line-of-credit agreement of $25,000.





We
      have
      historically funded its cash needs through operating income and credit line
      draws as needed. It will continue to rely on sales revenue as its main source
      of
      liquidity and will incur debt primarily to fund inventory purchases as sales
      growth produces increased product demand. Liquidity needs that cannot be met
      by
      current sales revenue may also arise in certain unusual circumstances such
      as
      has previously occurred when rain and snow significantly slowed construction
      activity and resulted in a corresponding decline in demand for our products.
      In
      those circumstances, debt may be added to meet our fixed costs and to maintain
      inventory in anticipation of a spurt in product demand that generally occurs
      once a weather-related slowdown has ended.





On
      a
      long-term basis, we also anticipate that product demand will increase
      considerably as it continues to expand its marketing and advertising campaign,
      which may include the use of television, radio, print and internet advertising.
      Efforts are well underway to increase the number of out-of-state sales
      representatives/brokers who will market our products throughout the country.
      As
      sales increase, we can add a second shift to meet the additional product demand
      without having to use funds to expand its production facilities. If additional
      cash becomes necessary to fund its growth, we may raise this capital through
      an
      additional follow-on stock offering rather than taking on more debt. However,
      there can be no assurance that we will be able to obtain additional equity
      or
      debt financing in the future. If we are unable to raise additional capital
      as
      needed, our growth potential will be adversely affected, and we would have
      to
      significantly modify its plans.





10
 *Table
          of Contents*




**Item
      7. Financial
      Statements**




**CONTENTS**REPORT
                  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              12CONSOLIDATED
                  BALANCE SHEET ASSETS,
                  LIABILITIES AND STOCKHOLDERS’ EQUITY
              14CONSOLIDATED
                  INCOME STATEMENTS
              15CONSOLIDATED
                  STATEMENT OF STOCKHOLDERS’ EQUITY
              16CONSOLIDATED
                  STATEMENTS OF CASH FLOWS
              17NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENT
              18-27




11
 *Table
          of Contents*
  **LAKE
          & ASSOCIATES, CPA’S LLC**
 
 
 REPORT
          OF
          INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To
          the
          Board of Directors and
 Stockholders
          of Metwood, Inc.
 
 We
          have
          audited the accompanying consolidated balance sheet of Metwood, Inc. (the
          “Company”) and its wholly-owned subsidiary as of June 30, 2007 and related
          consolidated statements of operations, stockholders’ equity, and cash flows for
          the year ending June 30, 2007. These financial statements are the responsibility
          of the company’s management. Our responsibility is to express an opinion on
          these financial statements based on our audits.
 
 We
          conducted our audit in accordance with the standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audit to obtain reasonable assurance about whether the
          financial
          statements are free of material misstatement. The Company is not required
          to
          have, nor were we engaged to perform, an audit of its internal control
          over
          financial reporting. Our audit included consideration of internal control
          over
          financial reporting as a basis for designing audit procedures that are
          appropriate in the circumstances, but not for the purpose of expressing
          an
          opinion on the effectiveness of the Company’s internal control over financial
          reporting. Accordingly, we express no such opinion. An audit also includes
          examining, on a test basis, evidence supporting the amounts and disclosures
          in
          the financial statements, assessing the accounting principles used and
          significant estimates made by management, as well as evaluating the overall
          financial statement presentation. We believe that our audits provide a
          reasonable basis for our opinion.
 
 In
          our
          opinion, the consolidated financial statements referred to above present
          fairly,
          in all material respects, the consolidated financial position of Metwood,
          Inc.
          (a Virginia corporation) and its wholly-owned subsidiary as of June 30,
          2007 and
          the results of its operations and its cash flows for year ended June 30,
          2007 in
          conformity with accounting principles generally accepted in the United
          States of
          America.
 
 /s/
          Lake & Associates, CPA’s LLC
 Lake
          & Associates, CPA’s LLC
 Boca
          Raton, Florida
 September
          5, 2007
  12
 *Table
              of Contents*
 **REPORT
            OF INDEPENDENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
   To
            the
            Board of Directors
 Metwood,
            Inc.
 819
            Naff
            Road
 Boones
            Mill, Virginia 24065
   We
            have
            audited the accompanying consolidated balance sheet of Metwood, Inc.
            (a Nevada
            corporation) and its wholly-owned subsidiary as of June 30, 2006 and
            the related
            consolidated statements of income, stockholders’ equity, and cash flows for the
            two years then ended. These consolidated financial statements are the
            responsibility of the Company’s management. Our responsibility is to express an
            opinion on these consolidated financial statements based on our
            audits.
  We
            conducted our audits in accordance with auditing standards of the Public
            Company
            Accounting Oversight Board (United States). Those standards require that
            we plan
            and perform the audits to obtain reasonable assurance about whether the
            financial statements are free from material misstatement. An audit includes
            examining, on a test basis, evidence supporting the amounts and disclosures
            in
            the financial statements. An audit also includes assessing the accounting
            principles used and significant estimates made by management, as well
            as
            evaluating the overall financial statement presentation. We believe that
            our
            audits provide a reasonable basis for our opinion.
  In
            our
            opinion, the consolidated financial statements referred to above present
            fairly,
            in all material respects, the consolidated financial position of Metwood,
            Inc.
            and its wholly owned subsidiary as of June 30, 2006, and the consolidated
            results of its operations and its cash flows for the two years then ended
            in
            conformity with accounting principles generally accepted in the United
            States of
            America.
   /s/
            Bongiovanni & Associates, P.A.
 Bongiovanni
            & Associates, P.A.
 Cornelius,
            North Carolina
 September
            15, 2006


13
 *Table
          of Contents*




**METWOOD,
                  INC. AND WHOLLY OWNED SUBSIDIARY****Balance
                  Sheet*****At
                  June 30, 2007***ASSETSCURRENT
                  ASSETSCash
                  and Cash Equivalents
              
              $
              38,287Accounts
                  Receivable
              
              
              398,042Inventory
              
              
              
              1,210,438Recoverable
                  Income Taxes
              
              
              57,077Prepaid
                  Expenses and Other Current Assets
              
              
              119,412TOTAL
                  CURRENT ASSETS
              
              
              1,823,256FIXED
                  ASSETSLeasehold
                  Improvements
              
              
              139,585Furniture,
                  Fixtures and Equipment
              
              
              75,851Computer
                  Hardware, Software & Peripherals
              
              
              173,148Machinery
                  and Shop Equipment
              
              
              325,602Vehicles
              
              
              
              365,5011,079,687Accumulated
                  Depreciation
              
              
              (579,356
              )Net
                  Fixed Assets
              
              
              500,331OTHER
                  ASSETSGoodwill
              
              
              
              253,088TOTAL
                  ASSETS
              
              $
              2,576,675LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  Payable
              
              $
              233,814Accrued
                  Expenses
              
              
              19,989Bank
                  Line of Credit Payable
              
              
              25,000Customer
                  Deposits
              
              
              5,000TOTAL
                  CURRENT LIABILITIES
              
              
              283,803LONG-TERM
                  LIABILITIESDeferred
                  Income Taxes, Net
              
              $
              117,009Related
                  Party Payable
              
              
              12,567129,576COMMITMENT
                  - NOTE D and GSTOCKHOLDERS'
                  EQUITYCommon
                  Stock ($.001 par value, 100,000,000 shares authorized:11,923,999
                  shares issued and outstanding at June 30, 2007)
              
              
              11,924Common
                  Stock Not Yet Issued ($.001 par value, 2,150 shares)
              
              
              2Additional
                  Paid-in-Capital
              
              
              1,319,317Retained
                  Earnings
              
              
              832,053TOTAL
                  STOCKHOLDERS' EQUITY
              
              
              2,163,296TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              2,576,675See
                  notes to consolidated audited financial statements and auditors'
                  report




14
 *Table
          of Contents*




**METWOOD,
                  INC. AND WHOLLY OWNED SUBSIDIARY****Income
                  Statements*****For
                  the Years Ending June 30, 2007 and 2006***2007
              
              
              2006REVENUES
                  AND COST OF SALES:Construction
                  Sales
              
              $
              4,262,071
              
              
              $
              4,030,648Engineering
                  Sales
              
              
              178,878
              
              
              
              211,475Gross
                  Sales
              
              
              4,440,949
              
              
              
              4,242,123Cost
                  of Construction Sales
              
              
              2,435,115
              
              
              
              2,382,542Cost
                  of Engineering Sales
              
              
              131,149
              
              
              
              156,450Gross
                  Cost of Sales
              
              
              2,566,264
              
              
              
              2,538,992Gross
                  Profit
              
              
              1,874,685
              
              
              
              1,703,131ADMINISTRATIVE
                  EXPENSES:Advertising
              
              
              123,115
              
              
              
              218,452Construction/Bidding
                  Data
              
              
              19,287
              
              
              
              11,419Depreciation
              
              
              57,096
              
              
              
              52,212Insurance
              
              
              90,396
              
              
              
              68,074Office
                  Expense
              
              
              35,321
              
              
              
              51,034Payroll
                  Expense
              
              
              771,793
              
              
              
              692,372Professional
                  Fees
              
              
              38,970
              
              
              
              42,390Rent
              
              
              78,600
              
              
              
              78,000Research
                  and Development
              
              
              13,000
              
              
              
              8,000Telephone
              
              
              38,734
              
              
              
              34,924Travel
              
              
              33,148
              
              
              
              35,270Vehicle
                  Expense
              
              
              62,392
              
              
              
              34,834Other
              
              
              179,859
              
              
              
              134,602TOTAL
                  EXPENSES
              
              
              1,541,711
              
              
              
              1,461,583OPERATING
                  INCOME
              
              
              332,974
              
              
              
              241,548Loss
                  on Sale of Fixed Assets
              
              
              -
              
              
              
              (866
              )Other
                  Income
              
              
              10,885
              
              
              
              19,623Income
                  Before Income Taxes
              
              
              343,859
              
              
              
              260,305Income
                  Taxes
              
              
              (131,778
              )
              
              
              (89,145
              )Net
                  Income
              
              $
              212,081
              
              
              $
              171,160Net
                  Income Per Common ShareBasic
                  & Fully Diluted
              
              $
              0.02
              
              
              $
              0.01Weighted
                  Average CommonShares
                  Outstanding
              
              
              11,920,259
              
              
              
              11,894,593See
                  notes to consolidated audited financial statements and auditors'
                  report




15
 *Table
          of Contents*




**METWOOD,
                  INC. AND WHOLLY OWNED SUBSIDIARY****Statement
                  of Stockholders' Equity*****For
                  the Years Ending June 30, 2007 and 2006***Common
              
              
              CommonShares
              
              
              StockCommon
              
              
              Common
              
              
              Not
                  Yet
              
              
              Not
                  Yet
              
              
              AdditionalShares
              
              
              Stock
              
              
              Issued
              
              
              Issued
              
              
              Paid-in
              
              
              Retained(000's)
              
              
              ($.001
                  Par)
              
              
              (000's)
              
              
              ($.001
                  Par)
              
              
              Capital
              
              
              EarningsBalances,
                  July 1, 2005
              
              
              11,878
              
              
              $
              11,878
              
              
              
              8
              
              
              
              8
              
              
              $
              1,304,818
              
              
              $
              448,812Net
                  income for year
              
              
              -0-
              
              
              
              -0-
              
              
              
              -0-
              
              
              
              -0-
              
              
              
              -0-
              
              
              
              171,160Common
                  stock subscribed but not yet issued
              
              
              -0-
              
              
              
              -0-
              
              
              
              19
              
              
              
              19
              
              
              
              5,946
              
              
              
              -0-Issuance
                  of common stock for services rendered
              
              
              9
              
              
              
              9
              
              
              
              -0-
              
              
              
              -0-
              
              
              
              3,126
              
              
              
              -0-Issuance
                  of common stock subscribed
              
              
              18
              
              
              
              18
              
              
              
              (11
              )
              
              
              (11
              )
              
              
              5,427
              
              
              
              -0-Balances,
                  June 30, 2006
              
              
              11,905
              
              
              $
              11,905
              
              
              
              16
              
              
              $
              16
              
              
              $
              1,319,317
              
              
              $
              619,972Net
                  income for year
              
              
              -0-
              
              
              
              -0-
              
              
              
              -0-
              
              
              
              -0-
              
              
              
              -0-
              
              
              
              212,081Issuance
                  of common stock for services rendered
              
              
              19
              
              
              
              19
              
              
              
              -0-
              
              
              
              -0-
              
              
              
              -0-
              
              
              
              -0-Issuance
                  of common stock subscribed
              
              
              -0-
              
              
              
              -0-
              
              
              
              (14
              )
              
              
              (14
              )
              
              
              -0-
              
              
              
              -0-Balances,
                  June 30, 2007
              
              
              11,924
              
              
              $
              11,924
              
              
              
              2
              
              
              $
              2
              
              
              $
              1,319,317
              
              
              $
              832,053See
                  notes to consolidated audited financial statements and auditors'
                  report




16
 *Table
          of Contents*




**METWOOD,
                  INC. AND WHOLLY OWNED SUBSIDIARY****Statements
                  of Cash Flows*****For
                  the Years Ending June 30, 2007 and 2006***2007
              
              
              2006CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  income
              
              $
              212,081
              
              
              $
              171,160Adjustments
                  to reconcile net income to netcash
                  provided by operating activities:Depreciation
              
              
              114,992
              
              
              
              112,967Provision
                  for deferred income taxes
              
              
              9,855
              
              
              
              18,193Loss
                  on sale of fixed assets
              
              
              -
              
              
              
              866Common
                  stock issued for services
              
              
              -
              
              
              
              3,135(Increase)
                  decrease in operating assets:Accounts
                  receivable
              
              
              95,598
              
              
              
              (9,609
              )Inventory
              
              
              (227,467
              )
              
              
              (253,510
              )Prepaid
                  expenses and other current assets
              
              
              (35,351
              )
              
              
              (15,838
              )Recoverable
                  income taxes
              
              
              (57,077
              )
              
              
              30,666Increase
                  (decrease) in operating liabilities:Accounts
                  payable and accrued expenses
              
              
              2,829
              
              
              
              (13,314
              )Current
                  income taxes payable
              
              
              (61,588
              )
              
              
              40,270NET
                  CASH PROVIDED BY OPERATING ACTIVITIES
              
              
              53,872
              
              
              
              84,986CASH
                  FLOWS FROM INVESTING ACTIVITIES:Expenditures
                  for fixed assets
              
              
              (153,032
              )
              
              
              (231,115
              )NET
                  CASH (USED IN) INVESTING ACTIVITIES
              
              
              (153,032
              )
              
              
              (231,115
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from issuance of common stock
              
              
              -
              
              
              
              11,402Incurrence
                  of related party payable
              
              
              12,567
              
              
              
              -Borrowings
                  from bank line of credit
              
              
              75,000
              
              
              
              -Repayment
                  of bank line of credit
              
              
              (50,000
              )
              
              
              -NET
                  CASH PROVIDED BY FINANCING ACTIVITIES
              
              
              37,567
              
              
              
              11,402NET
                  (DECREASE) IN CASH AND CASH EQUIVALENTS
              
              
              (61,593
              )
              
              
              (134,727
              )CASH
                  AND CASH EQUIVALENTS:Beginning
                  of year
              
              
              99,880
              
              
              
              234,607End
                  of year
              
              $
              38,287
              
              
              $
              99,880See
                  notes to consolidated audited financial statements and auditors'
                  report




17
 *Table
          of Contents*




**METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 Business
        Activity - Metwood, Inc. (the Company) was organized under the laws of the
        State of Virginia on April 7, 1993.
 
 Effective
        June 30, 2000, the Company entered an Agreement and Plan of Reorganization
        to
        acquire the majority of the outstanding common stock of a publicly held shell
        corporation. The acquisition resulted in a tax-free exchange for federal
        and
        state income tax purposes. Upon acquisition, the name of the shell corporation
        was changed to Metwood, Inc. (a Nevada corporation). Metwood, Inc. (a Virginia
        corporation) became a wholly owned subsidiary of Metwood, Inc. (a Nevada
        corporation). The transaction was accounted for as a reverse merger in
        accordance with Accounting Principles Board (“APB”) Opinion No. 16 wherein the
        stockholders of Metwood, Inc. (a Virginia corporation) retained the majority
        of
        the outstanding common stock of the Company after the merger. The publicly
        traded shell corporation did not have a material operating history for several
        years prior to the merger.
 
 Effective
        January 1, 2002, the Company acquired certain assets of Providence Engineering,
        PC (“Providence”), a professional engineering firm with customers in the same
        proximity as the Company. The total purchase price of $350,000 was paid with
        $60,000 in cash and with 290,000 shares of the Company’s common stock to the two
        Providence shareholders. These shares were valued at the closing active quoted
        market price of the stock at the effective date of the purchase, which was
        $1
        per share. One of the shareholders of Providence was also an officer and
        existing shareholder of the Company prior to the acquisition. The transaction
        was accounted for under the purchase method of accounting, and the purchase
        price was allocated as follows:
 
 Accounts
                  receivable
              
              $
              75,000Fixed
                  assets
              
              
              45,000Goodwill
              
              
              230,000Total
              
              $
              350,000
 
 In
        prior
        years, liabilities assumed at the date of acquisition were identified and
        paid.
        The amount of the liabilities paid was $23,088 and has been added to
        goodwill.
 
 The
        consolidated company provides construction-related products and engineering
        services to residential customers and contractors, commercial contractors,
        developers and retail enterprises, primarily in southwestern
        Virginia.
  18
 *Table
            of Contents*
  **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)**
 
 Basis
        of Presentation— The financial statements include the accounts of Metwood,
        Inc. (a Nevada corporation) and its wholly owned subsidiary, Metwood Inc.
        (a
        Virginia corporation) prepared in accordance with accounting principles
        generally accepted in the United States of America and pursuant to the rules
        and
        regulations of the Securities and Exchange Commission. All significant
        intercompany balances and transactions have been eliminated.
 
 Fair
        Value of Financial Instruments– The carrying amounts reported in the
        consolidated balance sheet for cash, accounts receivable, inventory, prepaid
        expenses and other current assets, accounts payable, accrued expenses, customer
        deposits and bank credit line approximate fair values based on the short-term
        maturity of these instruments.
 
 Accounts
        Receivable— The Company grants credit in the form of unsecured accounts
        receivable to its customers based on an evaluation of their financial condition.
        The Company performs ongoing credit evaluations of its customers. The estimate
        of the allowance for doubtful accounts, which is charged off to bad debt
        expense, is based on management’s assessment of current economic conditions and
        historical collection experience with each customer. At June 30, 2007 allowance
        for doubtful accounts was approximately $8,000. Specific customer receivables
        are considered past due when they are outstanding beyond their contractual
        terms
        and are charged off to the allowance for doubtful accounts when determined
        uncollectible. For the years ended June 30, 2007 and 2006, the bad debt expense
        was $30,887 and $1,220, respectively.
 
 Fixed
        Assets– Fixed assets are recorded at cost and include expenditures that
        substantially increase the productive lives of the existing assets. Maintenance
        and repair costs are expensed as incurred. Depreciation is provided using
        the
        straight-line method. Depreciation of fixed assets is calculated over management
        prescribed recovery periods that range from three to thirty years.
 
 When
        a
        fixed asset is disposed of, its cost and related accumulated depreciation
        are
        removed from the accounts. The difference between undepreciated cost and
        the
        proceeds from disposition is recorded as a gain or loss.
 
 Management’s
        Use of Estimates— The preparation of consolidated financial statements in
        conformity with accounting principles generally accepted in the United States
        of
        America requires management to make estimates and assumptions that affect
        the
        reported amounts of assets and liabilities and disclosures of contingent
        assets
        and liabilities at the date of consolidated financial statements and the
        reported amounts of revenues and expenses during the reporting period. At
        June
        30, 2007, the significant estimates used by management include the valuation
        of
        its goodwill. Actual results could differ from those estimates.
  19
 *Table
            of Contents*
  **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)**
 
 Cash
        and Cash Equivalents— For purposes of the Consolidated Statements of Cash
        Flows, the Company considers liquid investments with an original maturity
        of
        three months or less to be cash equivalents. The Company maintains its cash
        in
        bank deposit accounts, which, at times, may exceed the federally insured
        limit
        of $100,000. The Company has not experienced any losses in such accounts.
        The
        Company believes it is not exposed to any significant credit risk on cash
        and
        cash equivalents.
 
 Revenue
        Recognition— Revenue is recognized when goods are shipped and earned or
        when services are performed, provided collection of the resulting receivable
        is
        probable. If any material contingencies are present, revenue recognition
        is
        delayed until all material contingencies are eliminated. Further, no revenue
        is
        recognized unless collection of the applicable consideration is
        probable.
 
 Income
        Taxes— Income taxes are accounted for in accordance with SFAS No. 109,
“Accounting for Income Taxes.” A deferred tax asset or liability is recorded for
        all temporary differences between financial and tax reporting and for net
        operating loss carry forwards, where applicable. Deferred tax assets are
        reduced
        by a valuation allowance when, in the opinion of management, it is more likely
        than not that some portion or the entire deferred tax asset will not be
        realized. Deferred tax assets and liabilities are adjusted for the effect
        of
        changes in tax laws and rates on the date of enactment.
 
 Earnings
        Per Common Share— Basic earnings per share amounts are based on the
        weighted average shares of common stock outstanding. If applicable, diluted
        earnings per share would assume the conversion, exercise or issuance of all
        potential common stock instruments such as options, warrants and convertible
        securities, unless the effect is to reduce a loss or increase earnings per
        share. This presentation has been adopted for the years presented. There
        were no
        adjustments required to net income for the years presented in the computation
        of
        diluted earnings per share.
 
 Advertising— The Company expenses advertising costs as incurred. However, certain
        expenditures are treated as prepaid (such as trade show fees) if they are
        for
        goods or services which will not be received until after the end of the
        accounting period, and they are subsequently recognized as expenses in those
        periods in which the goods or services are received.
 
 Inventory
        - Inventory, consisting of metal and wood raw materials located in the Company’s
        leased premises and is stated at the lower of cost or market using the first-in,
        first-out (FIFO) method.
  20
 *Table
            of Contents*
  **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)**
 
 Patents— The Company has been assigned several key product patents developed by
        certain Company officers. No value has been recorded in the Company’s financial
        statements because the fair value of the patents was not determinable within
        reasonable limits at the date of assignment.
 
 Research
        and Development— The Company performs research and development on its
        metal/wood products, new product lines, and new patents. Costs, if any, are
        expensed as they are incurred. For the years ended June 30, 2007 and 2006,
        the
        expenses relating to research and development were $13,000 and $8,000,
        respectively.
 
 Goodwill— In June 2001 the Financial Accounting Standards Board (“FASB”) issued
        Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and
        Other Intangible Assets.” This statement requires that goodwill and intangible
        assets deemed to have an indefinite life not be amortized. Instead, such
        assets
        are to be tested for impairment annually or immediately if conditions indicate
        that such an impairment could exist. Transition to the new rules of SFAS
        142
        requires the completion of a transitional impairment test of goodwill within
        the
        first year of adoption. The Company adopted the provisions of SFAS 142 beginning
        July 1, 2002 and completed the transitional impairment test of goodwill as
        of
        July 1, 2002 and again as of June 30, 2007 and 2006 using discounted cash
        flow
        estimates and found no goodwill impairment.
 
 Recent
        Accounting Pronouncements- In February 2006, FASB issued
        SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments”. SFAS No.
        155 amends SFAS No 133, “Accounting for Derivative Instruments and Hedging
        Activities”, and SFAF No. 140, “Accounting for Transfers and Servicing of
        Financial Assets and Extinguishments of Liabilities”. SFAS No. 155, permits fair
        value re-measurement for any hybrid financial instrument that contains an
        embedded derivative that otherwise would require bifurcation, clarifies which
        interest-only strips and principal-only strips are not subject to the
        requirements of SFAS No. 133, establishes a requirement to evaluate interest
        in
        securitized financial assets to identify interests that are freestanding
        derivatives or that are hybrid financial instruments that contain an embedded
        derivative requiring bifurcation, clarifies that concentrations of credit
        risk
        in the form of subordination are not embedded derivatives, and amends SFAS
        No.
        140 to eliminate the prohibition on the qualifying special-purpose entity
        from
        holding a derivative financial instrument that pertains to a beneficial interest
        other than another derivative financial instrument. This statement is effective
        for all financial instruments acquired or issued after the beginning of the
        Company’s first fiscal year that begins after September 15, 2006. The adoption
        of SFAS No. 155 is not expected to have a material impact on the Company’s consolidatedresults of
        operations or financial position.
  21
 *Table
            of Contents*
  **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)**
 
 Recent
        Accounting Pronouncements (Cont.)- In June 2006, the FASB issued
        Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an
        interpretation of FASB Statement No. 109” (“FIN 48”) which prescribes a
        recognition threshold and measurement attribute, as well as criteria for
        subsequently recognizing, derecognizing and measuring uncertain tax positions
        for financial statement purposes. FIN 48 also requires expanded disclosure
        with
        respect to the uncertainty in income tax assets and liabilities. FIN 48 is
        effective for fiscal years beginning after December 15, 2006, which will
        be the
        Company’s calendar year 2007, and is required to be recognized as a change in
        accounting principle through a cumulative-effect adjustment to retained earnings
        as of the beginning of the year of adoption. The adoption of FIN 48 is not
        expected to have a material impact on the Company’s consolidated results of
        operations or financial position.
 
 In
        June
        2006, the Financial Accounting Standards Board (“FASB”) ratified the provisions
        of Emerging Issues Task Force (“EITF”) Issue No. 06-3, “How Taxes Collected from
        Customers and Remitted to Governmental Authorities Should Be Presented in
        the
        Income Statement (That Is, Gross versus Net Presentation)”. EITF Issue No. 06-3
        requires that the presentation of taxes within revenue-producing transactions
        between a seller and a customer, including but not limited to sales, use,
        value
        added, and some excise taxes, should be on either a gross (included in revenue
        and cost) or a net (excluded from revenue) basis. In addition, for any such
        taxes that are reported on a gross basis, a company should disclose the amounts
        of those taxes in interim and annual financial statements for each period
        for
        which an income statement is presented if those amounts are significant.
        The
        disclosure of those taxes can be done on an aggregate basis. EITF Issue No.
        06-3
        is effective for fiscal years beginning after December 15, 2006, which will
        be
        the Company’s fiscalyear
        2008. The adoption of
        EITF
        Issue No. 06-3 is not expected to have a material impact on the Company’s consolidatedresults of
        operations or financial position.
 
 In
        September 2006, the Securities and
        Exchange Commission issued Staff Accounting Bulletin No.108 (“SAB No. 108”),
“Considering the Effects of Prior Year Misstatements when Quantifying Current
        Year Misstatements”. SAB No. 108 requires analysis of misstatements using both
        an income statement (rollover) approach and a balance sheet (iron curtain)
        approach in assessing materiality and provides for a one-time cumulative
        effect
        transition adjustment. SAB No. 108 is effective for the fiscal year
        beginning November 15, 2006. The Company has adopted
        SAB No. 108
        effective for the year endJune 30, 2008.
 
 Any
        error
        in the financial statements of a prior period discovered subsequent to their
        issuance shall be reported as a prior-period adjustment by restating the
        prior-period financial statements. Restatement requires that:
  22
 *Table
            of Contents*
  **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)**
 
 Recent
        Accounting Pronouncements (Cont.)–
 
 a.
        The
        cumulative effect of the error on periods prior to those presented shall
        be
        reflected in the carrying amounts of assets and liabilities as of the beginning
        of the first period presented.
 b.
        An
        offsetting adjustment, if any, shall be made to the opening balance of retained
        earnings (or other appropriate components of equity or net assets in the
        statement of financial position) for that period.
 c.
        Financial statements for each individual prior period presented shall be
        adjusted to reflect correction of the period-specific effects of the
        error.
 
 In
        March
        2006, the FASB issued SFAS No. 156. This Statement amends FASB Statement
        No.
        140, Accounting for Transfers and Servicing of Financial Assets and
        Extinguishments of Liabilities, with respect to the accounting for separately
        recognized servicing assets and servicing liabilities. This Statement is
        effective as of the beginning of its first fiscal year that begins after
        September 15, 2006. An entity should apply the requirements for recognition
        and
        initial measurement of servicing assets and servicing liabilities prospectively
        to all transactions after the effective date of this Statement.
  In
        September 2006, the FASB issued SFAS No. 157 and No. 158. Statement No. 157
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles (GAAP), and expands disclosures
        about
        fair value measurements. This Statement applies under other accounting
        pronouncements that require or permit fair value measurements, the Board
        having
        previously concluded in those accounting pronouncements that fair value is
        the
        relevant measurement attribute. Accordingly, this Statement does not require
        any
        new fair value measurements. However, for some entities, the application
        of this
        Statement will change current practice.
 
 Statement
        No. 158 is an amendment of FASB Statements No. 87, 88, 106, and 132(R). It
        improves financial reporting by requiring an employer to recognize the over
        funded or under funded status of a defined benefit postretirement plan (other
        than a multiemployer plan) as an asset or liability in its statement of
        financial position and to recognize changes in that funded status in the
        year in
        which the changes occur through comprehensive income of a business entity
        or
        changes in unrestricted net assets of a not-for-profit organization. This
        Statement also improves financial reporting by requiring an employer to measure
        the funded status of a plan as of the date of its year-end consolidatedstatement of
        financial position, with limited exceptions.
  The
        Company does not expect application of SFAS No. 156, 157 and 158 to have
        a
        material effect on its consolidated financial statements.
  23
 *Table
            of Contents*
  **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        B – SUPPLEMENTAL CASH FLOW INFORMATION**
 
 Supplemental
        disclosures of cash flow information for the years ended June 30, 2007 and
        2006
        are summarized as follows:
 
 2006
              
              
              2007Cash
                  paid for :Income
                  taxes
              
              $
              21,318
              
              
              $
              240,498Interest
              
              $
              —
              
              
              $
              1,080Supplemental
                  disclosures of non-cash investing and financing
                  activities:
 
 **NOTE
        C – RELATED PARTY TRANSACTIONS**
 
 For
        the
        years ended June 30, 2007, the Company had sales of $5,911 to a company owned
        by
        the CEO, Robert Callahan. For the year ended June 30, 2006, the Company had
        sales of $47,831 to its shareholder and CEO, Robert Callahan. As of June
        30,
        2007, the related party receivable with Mr. Callahan and the company he owns
        was
        $-0-.
 
 As
        of
        June 30, 2007, the Company had a related party payable to Cahas Mountain
        Properties, Inc. a company owned by Mr. Callahan, for monies
        advanced.
 
 **NOTE
        D – COMMITMENT**
 
 In
        prior
        years, the Company implemented a stock-based incentive compensation plan
        for its
        employees. Participating employees have an after-tax deduction withheld by
        the
        Company throughout the calendar year. As of December 31 of each year, the
        employee is considered vested in the plan, and the Company will match the
        participating employee’s withheld amounts. The Company may also make a
        discretionary contribution based upon pay incentives or attendance.
        Periodically, the Company will purchase restricted stock on behalf of the
        employee in the amount of his withholdings, the Company’s match, and any
        discretionary contributions.
 
 As
        of
        June 30, 2006, the Company had ten participating employees who withheld an
        amount immaterial to the consolidated financial statements. No accrual for
        the
        Company’s match has been made in the current year.
  24
 *Table
            of Contents*
  **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        E – SHORT-TERM BORROWINGS AND CREDIT ARRANGEMENTS**
 
 The
        Company has available a $600,000 revolving line of credit with a local bank.
        Interest is payable monthly on the outstanding balance at the prime lending
        rate, which was 8.0% as of June 30, 2007. The note is secured by accounts
        receivable, equipment, general intangibles, inventory, and fixtures and
        furniture and is personally guaranteed by the Company’s CEO. The balance
        outstanding as of June 30, 2007 was $25,000.
 
 **NOTE
        F – EQUITY**
 
 During
        the years ended June 30, 2007
        and 2006, the Company issued -0- and 9,500 common shares in payment for services
        valued at $-0- and $3,135, respectively. The common shares werevalued
        at the fair
        market value of the shares at the time of issuance as determined by a third
        party source.
 
 **NOTE
        G – SALE OF FIXED ASSETS AND RELATED OPERATING LEASE**
 
 During
        the year ended June 30, 2006, the Company entered into a sales and leaseback
        transaction with a related party. The Company sold its various buildings
        at its
        corporate headquarters which house its manufacturing plants, executive offices,
        and other buildings for $600,000 in cash. The Company simultaneously entered
        into a commercial lease agreement with this entity whereby the Company is
        committed to lease back these same properties for $6,200 per month over a
        ten
        year term expiring on December 31, 2014. Rent expense charged to operations
        for
        the years ended June 30, 2007 and 2006 was $78,600 and $78,000,
        respectively.
 
 Future
        minimum rental payments as of June 30, 2007 in the aggregate and for each
        of the
        five succeeding years and thereafter are as follows:
 
 Year                                                                           Amount
 2008                                                                           $   74,400
 2009                                                                               74,400
 2010                                                                               74,400
 2011                                                                               74,400
 2012                                                                               74,400
 Thereafter                                                                   186,000
 $558,000
 
 25
 *Table
            of Contents*
  **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        H – INCOME TAXES**
 
 The
        components of income tax expense for the years ended June 30, 2007 and 2006
        consist of:
 
 2006
              
              2007Current:Federal
              
              $
              58,869
              
              
              $
              102,864State
              
              
              12,067
              
              
              
              19,05970,936
              
              
              
              121,923Deferred:Federal
              
              
              14,247
              
              
              
              7,650State
              
              
              3,962
              
              
              
              2,20518,209
              
              
              
              9,855Total
                  income tax expense
              
              $
              89,145
              
              
              $
              131,778
  The
        reconciliation of the provision for income taxes at the U. S. federal statutory
        income tax rate of 39% to the Company’s income taxes for the years ending June
        30, 2006 and 2007 is as follows:
  Income
                    before income taxes
                
                $
                260,305
                
                
                $
                343,859Income
                    tax expense computed at the statutory rate
                
                
                101,519
                
                
                
                134,105State
                    income tax, net of federal tax effect
                
                
                14,637
                
                
                
                21,264Non-deductible
                    expenses
                
                
                (2,575
                )
                
                
                (3,084
                )Effect
                    of graduated income tax rates
                
                
                (24,436
                )
                
                
                (20,507
                )Total
                    income tax expense
                
                $
                89,145
                
                
                $
                131,778
  Deferred
        income taxes reflect the net tax effects of temporary differences between
        the
        carrying amounts of assets and liabilities for financial reporting purposes
        and
        the amount used for federal and state income tax purposes. Deferred tax
        liabilities at June 30, 2007 were $117,009, net of deferred tax assets of
        $-0-.
        The components of these amounts are as follows:
 
 Depreciation
              
              $
              91,633Amortization
                  of goodwill
              
              
              25,376Net
                  deferred tax liabilities
              
              $
              117,009
 
 26
 *Table
            of Contents*
  **METWOOD,
        INC. AND WHOLLY OWNED SUBSIDIARY**
 **Consolidated
        Notes To Audited Financial Statements**
 **For
          the Years Ended June 30, 2007 and 2006**
 **NOTE
        I – CONCENTRATIONS**
 
 There
        is
        no single customer or group of related customers from whom the Company derived
        more than 10% of its accounts receivable as of June 30, 2007. The Company
        is
        potentially vulnerable to a concentration-related risk with respect to its
        metal
        suppliers, however, since three vendors supply approximately 70% of the metal
        used in the manufacture of the Company’s products, though these vendors have
        been used primarily because of their competitive pricing. Several other metal
        suppliers are available to the Company, but purchasing from them, should
        that
        become necessary, would likely result in increased costs.
 
 **NOTE
        J – SEGMENT INFORMATION**
 
 The
        Company operates in two principal business segments: (1) construction-related
        products and (2) engineering services. Performance of each segment is evaluated
        based on profit or loss from operations before income taxes. These reportable
        segments are strategic business units that offer different products and
        services. Summarized revenue and expense information by segment for the years
        ended June 30, 2006 and 2007 is as follows:
 
 2006
              
              
              2007Construction:Sales
              
              $
              4,030,648
              
              
              $
              4,262,071Cost
                  of sales
              
              $
              (2,382,542
              )
              
              $
              (2,435,115
              )Corporate
                  and other expenses
              
              $
              (1,496,312
              )
              
              $
              (1,625,136
              )Segment
                  income
              
              $
              151,794
              
              
              $
              201,820Total
                  assets
              
              $
              2,122,843
              
              
              $
              2,323,587Capital
                  expenditures
              
              $
              208,823
              
              
              $
              139,083Depreciation
              
              $
              100,428
              
              
              $
              101,708Interest
                  expense
              
              $
              —
              
              
              $
              1,080
 
 2006
              
              
              2007Engineering:Sales
              
              $
              211,475
              
              
              $
              178,878Cost
                  of sales
              
              $
              (156,450
              )
              
              $
              (131,149
              )Corporate
                  and other expenses
              
              $
              (35,659
              )
              
              $
              (37,468
              )Segment
                  income
              
              $
              19,366
              
              
              $
              10,261Total
                  assets
              
              $
              253,088
              
              
              $
              253,088Capital
                  expenditures
              
              $
              22,292
              
              
              $
              13,949Depreciation
              
              $
              12,539
              
              
              $
              13,284Interest
                  expense
              
              $
              —
              
              
              $
              —


27
 *Table
          of Contents*




**Item
      8. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure**




None.




**Item
      8A. Controls and
      Procedures**





a.
            Our
                Chief Executive Officer and Chief Financial Officer have evaluated
                the
                effectiveness of our disclosure controls and procedures, as defined
                in
                Rules 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange
                Act”), as of the end of the period covered by this Annual Report (the
                “Evaluation Date”). Based on such evaluation, such officers have concluded
                that, as of the Evaluation Date, our disclosure controls and procedures
                are effective in alerting our management on a timely basis to material
                information required to be disclosed in our reports filed under the
                Exchange Act.





b.
            There
                have been no significant changes in our internal controls or in other
                factors that could significantly affect such controls since the Evaluation
                Date.





**PART
      III**





**Item
      9. Directors and Executive Officers of the
      Registrant**





Identification
      of Directors and Executive Officers





The
      following table sets forth the names and the nature of all positions and offices
      held by all directors and executive officers for the year ending June 30, 2007
      and to the date of the filing of this report and the periods during which each
      such director or executive officer has served in his or her respective
      positions:





**Name**
            **Position
                and Background****Robert
                M. Callahan**
            **President,
                **Chief
                Executive officer****




Mr.
                Callahan has been involved in the building industry for over thirty
                years.
                He is well recognized in southwestern Virginia as an innovator in
                the uses
                of passive solar design and wood/metal products in custom home building.
                Along with Mr. Ronald Shiflett, he formed Metwood, Inc. in 1993 to
                bring
                light-gage construction, used in commercial building for years, into
                common use in residential
                construction.




**Shawn
                A. Callahan**
            **Secretary/Treasurer,
                Vice President/General Manager, Chief Financial
                Officer**Education:
                 B.S. Computer Science and Mathematics, Virginia Military
                Institute




Since
                starting with Metwood, Inc. in May 1996, Mr. Callahan has played
                a major
                role in our restructuring, increasing production, improving efficiency,
                and developing computer aids for
                us.





28
 *Table
          of Contents*




Term
      of Office





The
      term
      of office of the current directors shall continue until new directors are
      elected or appointed.





Family
      Relationships





Robert
      Callahan is the father of Shawn Callahan.





Involvement
      in Certain Legal Proceedings





Except
      as
      indicated below and to the knowledge of management, during the past five years,
      no present or former director, person nominated to become a director, executive
      officer, promoter or control person of us:





(1)    
      was a general partner or executive officer of any business by or against which
      any bankruptcy petition was filed, whether at the time of such filing or two
      years prior thereto;





(2)    
      was convicted in a criminal proceeding or named the subject of a pending
      criminal proceeding (excluding traffic violations and other minor
      offenses);





(3)    
      was the subject of any order, judgment or decree, not subsequently reversed,
      suspended or vacated, of any court of competent jurisdiction, permanently or
      temporarily enjoining, barring, suspending or otherwise limiting his involvement
      in any type of business, securities or banking activities;





(4)    
      was the subject of any order, judgment or decree, not subsequently reversed,
      suspended or vacated, of any federal or state authority barring, suspending
      or
      otherwise limiting for more than sixty days the right of such person to engage
      in any activity described above under this Item, or to be associated with
      persons engaged in any such activity; or





(5)    
      was found by a court of competent jurisdiction (in a civil action), the
      Commission or the Commodity Futures Trading Commission to have violated a
      federal or state securities or commodities law, nor has a judgment been
      reversed, suspended, or vacated.




29
 *Table
          of Contents*





Compliance
      with Section 16(a) of the Exchange Act





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires our
      directors, officers and persons who own more than 10% of our common stock or
      other registered class of equity securities to file reports of ownership and
      changes in ownership with the Securities and Exchange Commission. Officers,
      directors and greater than 10% shareholders are required to furnish us with
      copies of all Section 16(a) forms they file.





Based
      solely on a review of the forms received covering purchase and sale transactions
      in our common stock during the fiscal year ended June 30, 2007, we believe
      that
      each person who, at any time during that period, was a director, executive
      officer, or beneficial owner of more than 10% of our common stock complied
      with
      all Section 16(a) filing requirements.





**Item
      10. Executive
      Compensation**





The
      following table sets forth in summary form the compensation received during
      each
      of our last three fiscal years by our President and Chief Executive Officer,
      Robert M. Callahan:




***Summary
      Compensation Table***





****
            **Fiscal**
              **Year**
            **Annual**
              **Salary**
            **Bonuses**
            **Other**
              **Compen-**
              **sation**
            **Restricted**
              **Stock**
              **Awards**
            **LTIP**
              **Options**
            **Restricted**
              **Stock**
              **Bonuses**
            ****(1)
            (2)
            (3)
            (4)
            (5)
            (5)2007
            $91,034
            17,750
            -0-
            -0-
            -0-
            -0-2006
            $79,000
            5,000
            -0-
            -0-
            -0-
            -0-2005
            $72,000
            -0-
            -0-
            -0-
            -0-
            -0-





(1)
            The
                dollar value of base salary (cash and non-cash) received, including
                amounts paid to Carolyn Callahan, wife of Robert M.
                Callahan.





(2)
            The
                dollar value of bonuses (cash and non-cash)
                received.





(3)
            During
                the periods covered by the table, we did not pay any other annual
                compensation not properly categorized as salary or bonus, including
                perquisites and other personal benefits, securities or
                property.





(4)
            During
                the periods covered by the table, we did not make any award of restricted
                stock.





(5)
            We
                currently have no stock option or restricted stock bonus
                plans.





No
      member
      of our management has been granted any option or stock appreciation right;
      accordingly, no tables relating to such items have been included within this
      item.




30
 *Table
          of Contents*





Compensation
      of Directors





There
      are
      no standard arrangements pursuant to which our directors are compensated for
      any
      services provided as director. No additional amounts are payable to our
      directors for committee participation or special assignments.




There
      are
      no arrangements pursuant to which any of our directors was compensated during
      our last completed fiscal year or the previous two fiscal years for any services
      provided as director.





Termination
      of Employment and Change of Control Arrangement





There
      are
      no compensatory plans or arrangements, including payments to be received from
      us, with respect to any person named in the Summary Compensation Table set
      out
      above which would in any way result in payments to any such person because
      of
      his resignation, retirement or other termination of such person’s employment
      with us or our subsidiaries, or any change in control of us, or a change in
      the
      person’s responsibilities following a change in control of us.





**Item
      11 . Security Ownership of Certain Beneficial
      Owners and Management**





Security
      Ownership of Certain Beneficial Owners





The
      following table sets forth the shares held by those persons who owned more
      than
      five percent of Metwood’s common stock as of September 7, 2007, based upon
      11,923,999 shares outstanding:


***Greater
      Than 5% Owners***





**Title
                of**
              **Class**
            **Name
                and Address**
              **of
                Beneficial Owner**
            **No.
                of**
              **Shares**
            
            **Percent**
              **of
                Class**Common
            Robert
                Callahan
              819
                Naff Road
              Boones
                Mill, VA 24065
            6,503,415
            (1)
            54.5%Common
            Ronald
                Shiflett
              819
                Naff Road
              Boones
                Mill, VA 24065
            2,151,282
            (2)
            18.0%




(1)
            Includes
                direct and indirect interests. There are 4,000,000 common shares
                included
                in this amount that are owned in the names of family members of Mr.
                Callahan.





(2)   Ronald
      Shiflett has authorized Robert M. Callahan to have the voting rights for his
      shares of stock.




31
 *Table
          of Contents*




Security
      Ownership of Management





The
      following table sets forth the shares held by Metwood directors and officers
      as
      of September 7, 2007:




***Management
      Ownership***





**Title
                of**
              **Class**
            **Name
                and Address**
              **of
                Beneficial Owner**
            **No.
                of**
              **Shares**
            
            **Percent**
              **of
                Class**Common
            Robert
                Callahan
              819
                Naff Road
              Boones
                Mill, VA 24065
            6,503,415
            (1)
            54.5%





(1)  Includes
                direct and indirect interests. There are 4,000,000 common shares
                included
                in this amount that are owned in the names of family members of Mr.
                Callahan.




* Less
                than 1%





Ownership
                of shares by directors and officers of Metwood as a group:
                55.1%.





Changes
      in Control





We
      know
      of no contractual arrangements which may at a subsequent date result in a change
      our control.





**Item
      12 . Certain Relationships and Related
      Transactions**





Following
      are the transactions between Metwood and members of management, directors,
      officers, 5% shareholders, and promoters of Metwood:





We
      contract with a construction company 50% owned by our CEO which provides capital
      improvements and maintenance work on our buildings and grounds.





On
      January 3, 2005, we entered into a sales and leaseback transaction with Cahas
      Mountain Properties, LLC (“Cahas”). Cahas is an LLC that is partially owned by
      members of the Callahan family which are also officers and directors of us.
      We
      sold our various buildings at our corporate headquarters which house our
      manufacturing plants, executive offices, and other buildings on January 3,
      2005
      for $600,000 in cash. We simultaneously entered into a commercial lease
      agreement with this entity whereby we committed to lease back these same
      properties for $6,200 per month over a ten year term. We paid $78,600 and
      $78,000 in rent to Cahas during fiscal 2007 and fiscal 2006,
      respectively.




32
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**Item
      13 . Exhibits and Reports on Form
      8-K**





(a)
            Exhibits





See
                index to exhibits





(b)
            Reports
                on Form 8-K





None.





**Item
      14 . Principal Accountant Fees and
      Services**





The
      following table sets forth the aggregate fees billed by Lake & Associates,
      CPA’s, PA and Bongiovanni & Associates, CPA’s for audit services rendered in
      connection with the consolidated financial statements and reports for the years
      ended June 30, 2007 and 2006, respectively:





2006
            
            
            2007Audit
                fees
            
            $
            17,000
            
            
            $
            20,000Audit-related
                fees
            
            
            —
            
            
            
            —Tax
                fees
            
            
            —
            
            
            
            —All
                other fees
            
            
            —
            
            
            
            —Total
                fees
            
            $
            17,000
            
            
            $
            20,000





*Audit
      fees*:  Consist of fees billed for professional services rendered for
      the audits of our consolidated financial statements and reviews of the interim
      consolidated financial statements included in quarterly reports and services
      that are normally provided by our auditors in connection with statutory and
      regulatory filings or engagements and attest services, except those not required
      by statute or regulation.





*Audit-related
      fees*:  Consist of fees billed for assurance and related services that
      are reasonably related to the performance of the audit or review of our
      consolidated financial statements and are not reported under “Audit fees.” These
      services include accounting consultations in connection with the Sarbanes-Oxley
      Act of 2002.





*Tax
      fees*: Consist of fees billed for tax compliance, tax advice and tax
      planning services.





*All
      other fees*: Consist of fees billed for all other services other than those
      reported above.





33
 *Table
          of Contents*




SIGNATURES





In
      accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant
      caused this report to be signed on its behalf by the undersigned, thereunto
      duly
      authorized.





Date:
                 September 7, 2007
            */s/
                Robert M. Callahan*
              Robert
                M. Callahan
              President,
                CEO and DirectorDate:
                 September 7, 2007
            */s/
                Shawn A. Callahan*
              Shawn
                A. Callahan
              Secretary/Treasurer
                and Director/CFO






34
 *Table
          of Contents*




**INDEX
      TO EXHIBITS**








**NUMBER**
            
            **DESCRIPTION
                OF EXHIBIT**3(i)*
            
            Articles
                of Incorporation3(ii)*
            
            By-Laws31.1
            
            Certification
                of Chief Executive Officer Pursuant to Securities Exchange Act Rules
                13a-14 and15d-14
                as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
                200231.2
            
            Certification
                of Chief Financial Officer Pursuant to Securities Exchange Act Rules
                13a-14 and15d-14
                as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
                200232.1
            
            Certifications
                Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)32.2
            
            Certifications
                Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002 (18 U.S.C.
                1350)





*Incorporated
      by reference on Form 8-K, filed February 16, 2000.








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